The Delray Beach, Fla.-based vendor will sell its Xmark Corp. subsidiary for $45 million to The Stanley Works, a New Britain, Conn.-based manufacturer of tools and security products. Xmark sells RFID technology to tag and track newborns and persons prone to wandering and to track medical equipment.
VeriChip will use the proceeds to retire all outstanding debt and to fund a special dividend to shareholders of at least $15 million. The company has approximately 11 million common shares outstanding. VeriChip went public in February 2007 at $6.50 per share; the stock closed May 15 at $2.27.
VeriChip CEO and Chair Scott Silverman and the board have mutually agreed that he will leave those positions at the closing of the Xmark sale but will remain as a consultant in the sale of remaining assets. The company also sells implantable chips to track human remains in a disaster and markets vibration monitoring equipment.
The company has retained an investment banking firm to assist in selling the VeriMed Health Link business line of implantable RFID identification chips. A small number of people have had the chips implanted. The chips contain information on how to access their electronic medical records in an emergency, but a hospital must have a VeriChip-supplied reader. Some Alzheimers’ patients also have had the chip implanted to combat wandering. The company is developing an implantable chip to measure glucose levels.
VeriChip is selling Xmark because as a public company, it received an offer it could not refuse, says Jay McKeage, vice president of corporate development. The company is looking to sell VeriMed because the unit is funded by Xmark and is not self-sustaining. “It’s much better with someone who can take it on board and further develop it,” he adds. McKeage would not comment on the reasons for Silverman’s departure.
During the first quarter of 2008, VeriChip had a net loss of $2.8 million, compared with a $3.3 million loss during the same period last year. Quarterly revenue rose 21% to $8.6 million. More information is available at verichipcorp.com.
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